Climate Change, Natural Disasters and Adaptation Investments: Inter- and Intra-port Competition and Cooperation

Speaker: Professor Anming Zhang, University of British Columbia

Time: 10:00 am, Friday, December 8, 2017

Venue: Room 702, Administration Building, Zijingang Campus

Abstract:

This paper investigates disaster adaptation investments made by two landlord ports with each severing its captive markets while competing for a common hinterland. Each port consists of a private port authority and a private terminal operator. The probability of a natural disaster, which is induced by climate change, is ambiguous at the start of an adaptation investment (“Knightian uncertainty”), but will be known after the investment. We examine the impacts of inter-port and intra-port competition and cooperation on the port adaptation investment. We find that high expectation of the disaster occurrence probability encourages the adaptation, while high variance of the disaster occurrence probability discourages the adaptation. Furthermore, inter-port competition results in more adaptation investments (the “competition effect”), whereas within a port there is free riding on adaptation between the port authority and the terminal operator (the “free-riding effect”). The higher expectation and larger variance of disaster occurrence probability, and a higher inter-port competition intensity (port service homogeneity) would strengthen both the competition effect and the free-riding effect.

About the speaker:

Anming Zhang is a Full Professor in Operations and Logistics and holds Vancouver International Airport Authority Chair Professor in Air Transportation at Sauder School of Business, University of British Columbia (UBC). He served as the Chair of the Operations and Logistics Division, Sauder School of Business (2003-2005), and as the Director of UBC’s Centre for Transport Studies (2003-2004). He has been the Vice President (Academic & Program) for the World Air Transport Research Society (ATRS) since 2006.


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